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Viewing report
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France Power Report Q4 2011
Business Monitor International, Nov 2011, Pages: 56
BMI View: No change of direction for the French power industry. It remains committed to nuclear technology, embracing the latest generation reactors and expanding its generating base in order to remain one of the world's biggest net exports of electricity. There is a near-term upsurge in gas use, at the expense of coal and oil, while non-hydro renewables will play a larger role as solar and wind programmes are rolled out.
During the period 2011-2015, French overall power generation is expected to increase by an annual average of 1.67%, reaching 581TWh. Driving this growth is an annual 5.35% gain in gas-fired generation and a 6.49% rise in renewables-based electricity supply. Coal-fired generation looks set to fall steadily during the forecast period, reflecting moves towards a greener and cleaner supply slate. With a likely reduction in oil-fired power, natural gas will be the thermal source of choice for France, particularly in combined cycle projects.
Following an increase in 2011 with real GDP of an estimated 1.8%, BMI forecasts average annual growth of 1.9% between 2011 and 2020. The population is expected to rise from the current level of 63.1mn to 65.9mn during the period 2011-2020, and net power consumption looks set to increase from 458TWh to 480TWh by 2015, rising further to 509TWh by 2020. During the period 2011-2015, the average annual growth rate for electricity demand is forecast at 1.19%, but accelerating somewhat later in the decade to an average 1.21% in 2016-2020.
Thanks partly to the forecast rise in net generation, growth of which exceeds that of the underlying demand trend, the French power supply surplus is likely to increase as new largely nuclear capacity kicks in. A gradual decline in the percentage of transmission and distribution losses from around 6.1% will help strengthen the market. The theoretical net export capability by 2015 is put at 67TWh, which should remain around this level through to 2020.
France is in a strong position to be the supplier of choice for Europe's power-short nations. Increased interconnection with its neighbours means that the massive nuclear generation base can be exploited as a means of supplying not just the UK, but also the likes of Spain. If Germany struggles to meet demand once its nuclear portfolio has been downsized, it could do worse than buy surplus French supply and strengthen further the French industry's commitment to nuclear and renewables expansion.
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